MarketAxess Q3 Earnings Beat on Strong Emerging Markets Volumes

MarketAxess Holdings Inc. MKTX reported third-quarter 2025 earnings per share of $1.84, which surpassed the Zacks Consensus Estimate by 8.9%. However, the bottom line decreased from $1.90 per share a year ago.Total revenues increased 1% year over year to $208.8 million. The top line also beat the consensus mark by 1.2%.The third-quarter results were driven by improving U.S. high-yield trading volumes, and emerging markets and Eurobonds commission revenues. Higher service revenues added to the upside. Geographic expansion and product diversification drove the average daily volume (ADV) of emerging markets and Eurobonds. However, the upside was partly offset by an elevated expense level.MarketAxess Holdings Inc. Price, Consensus and EPS Surprise MarketAxess Holdings Inc. price-consensus-eps-surprise-chart | MarketAxess Holdings Inc. QuoteMarketAxess’ Quarterly Operational UpdateCommission revenues of $180.2 million decreased from $180.4 million in the prior-year quarter, but beat the Zacks Consensus Estimate by 0.9%. Information services revenues were $13.8 million, which improved 6% year over year. The figure beat the consensus mark by 2.7%. Post-trade services revenues increased 9% year over year to $11.3 million, while technology services revenues jumped 20% year over year to $3.6 million.Total expenses increased 3% year over year to $123.2 million due to higher employee compensation and benefits, technology and communication, G&A expenses and professional and consulting fees. The metric was lower than our estimate of $126.4 million.MarketAxess’ net income of $68.3 million decreased 4% year over year but beat our estimate of $62.3 million. The net income margin deteriorated 190 basis points year over year to 32.7%.MarketAxess’ Trading VolumesThe high-grade trading volume of MarketAxess was $419.7 billion in the third quarter, which fell 7% year over year and also missed the Zacks Consensus Estimate by 3.7%. The ADV of the same product category decreased 7% year over year to $6.6 billion and missed the consensus mark by 3.3%.High-yield trading volume increased 5% year over year to $86.2 billion, while ADV also rose 5% year over year to $1.7 billion. Other credit trading volume of $40.3 billion rose 7% year over year, whereas ADV for the same product category grew 3% year over year to $631 million.Trading volume and ADV of emerging markets rose 14% and 14% on a year-over-year basis to $243.4 billion and $3.8 billion, respectively. The Eurobonds’ trading volume and ADV improved 7% and 7% on a year-over-year basis.The total credit trading volume of $932.4 billion grew 3% year over year. Total credit ADV rose 3% to $14.5 billion but missed the consensus mark by 1.3%. Total rates’ trading volume and ADV of this product category declined 8% each, respectively, on a year-over-year basis.MarketAxess’ Balance Sheet (As of Sept. 30, 2025)MarketAxess exited the third quarter with cash and cash equivalents of $473.3 million, which decreased from $544.5 million at 2024-end. Total assets of $2 billion increased from $1.8 billion at 2024-end.The company had no outstanding borrowings under its credit facility at the third-quarter end. Total stockholders’ equity of $1.4 billion declined marginally from the Dec. 31, 2024, level.MarketAxess’ Cash FlowsMarketAxess generated $90.2 million of net cash from operations in the third quarter, which declined from the prior-year figure of $95.1 million. Free cash flow advanced to $111.8 million from $86.3 million a year ago.MarketAxess’ Capital Deployment UpdateMarketAxess bought back shares worth $45.3 million in the quarter under review, and till October 2025, it bought back a total of shares worth $120 million from year-end. A leftover capacity of $105 million remained under the company’s authorized repurchase program as of Oct. 31, 2025. MKTX also declared a quarterly cash dividend of 76 cents per share.MarketAxess’ 2025 OutlookEarlier service revenues, which comprise Information Services, Post-Trade Services and Technology Services, were anticipated to witness mid-single-digit growth. Total expenses were earlier estimated to be between $505 million and $525 million for 2025. Capital expenditure was earlier projected to be between $65 million and $70 million, while the adjusted effective tax rate was expected to lie between 26% and 27%.MKTX’s Zacks Rank & Key PicksMKTX currently carries a Zacks Rank #5 (Strong Sell).Some better-ranked stocks in the broader Finance space are T. Rowe Price Group, Inc. TROW, Federated Hermes, Inc. FHI and Affiliated Managers Group, Inc. AMG, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for T. Rowe Price’s current-year earnings of $9.75 per share has witnessed five upward revisions in the past seven days against none in the opposite direction. T. Rowe Price beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 4%. The consensus estimate for current-year revenues is pegged at $7.2 billion, implying 2.1% year-over-year growth.The Zacks Consensus Estimate for Federated Hermes’ current-year earnings of $4.84 per share has witnessed three upward revisions in the past seven days against no movement in the opposite direction. Federated Hermes beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.9%. The consensus estimate for current-year revenues is pegged at $1.8 billion, calling for 8.1% year-over-year growth.The Zacks Consensus Estimate for Affiliated Managers Group’s current-year earnings is pegged at $25.13 per share, implying 17.7% year-over-year growth. In the past seven days, Affiliated Managers Group has witnessed four upward estimate revisions against one in the opposite direction. The consensus mark for the current-year revenues is pegged at $2.1 billion, calling for 1.6% year-over-year growth.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report T. Rowe Price Group, Inc. (TROW): Free Stock Analysis Report Affiliated Managers Group, Inc. (AMG): Free Stock Analysis Report MarketAxess Holdings Inc. (MKTX): Free Stock Analysis Report Federated Hermes, Inc. (FHI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks